Element Solutions Inc (ESI)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,421,200 | 1,414,700 | 1,596,700 | 1,439,000 | 1,067,700 |
| Payables | US$ in thousands | 121,300 | 140,600 | 72,400 | 138,400 | 95,600 |
| Payables turnover | 11.72 | 10.06 | 22.05 | 10.40 | 11.17 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,421,200K ÷ $121,300K
= 11.72
The payables turnover ratio for Element Solutions Inc. demonstrates notable fluctuations over the analyzed period. At the close of 2020, the ratio stood at 11.17, indicating that the company was turning over its payables approximately 11.17 times during that fiscal year. In 2021, this ratio decreased to 10.40, suggesting a slight slowdown in the company's payment cycle to suppliers.
However, a significant shift occurred by the end of 2022, when the payables turnover surged to 22.05. This increase implies that in 2022, the company was paying off its trade payables roughly 22 times—significantly faster than in prior years—potentially reflecting improved liquidity, better cash flow management, or a strategic decision to settle payables more promptly.
Following this peak, the ratio decreased again to 10.06 in 2023, indicating a return to a slower payment cycle similar to the levels seen in 2020 and 2021, which could be a result of changing supplier terms, cash flow adjustments, or shifts in procurement policies.
By the end of 2024, the payables turnover increased slightly to 11.72, suggesting a modest acceleration in the payment cycle, aligning more closely with historical values, and possibly reflecting a stabilization in payables management.
Overall, the observed pattern shows a period of rapid payment activity in 2022, contrasted by a more cautious or extended payables cycle in surrounding years. These fluctuations could be influenced by multiple factors including changes in supplier credit terms, liquidity position, or strategic shifts in working capital management.
Peer comparison
Dec 31, 2024